(Cross-posted on EquityBlog)
Was there any way to prevent the wave of foreclosures sweeping across low-income neighborhoods -- and act as a levee against the next wave? A very interesting new report answers with four simple words: "Yes, Community Land Trusts."
The report, by the Lincoln Institute of Land Policy and the National Community Land Trust Network, shows that only 0.52 percent of low-income CLT homebuyers were in foreclosure last year. Compare that to the 3.3 percent nationwide. CLT homebuyers were six times less likely to be foreclosed on last year.
So, what are Community Land Trusts? Owned by nonprofits, CLTs lease the land and typically sell the buildings on the land at below-market rates. This model benefits current and future homeowners. In exchange for purchasing homes at below-market prices, homeowners agree to limit the price of their homes when they sell, keeping them permanently affordable to future buyers while providing a fair return to the seller.
"It’s clear that community land trusts significantly lower the risks of owning a home," Roger Lewis, executive director of the National CLT Network, said in a release. "While home foreclosures are devastating families and neighborhoods across America, community land trusts are proving to be a highly effective way to create and sustain stable neighborhoods. That’s partly because community land trusts don’t allow the kind of ‘too-good-to-be-true’ financing that has taken down so many American families."
It's these kind of real, working, workable solutions that will make progressives actually achieve the change we seek. Nice to see a smart idea paying off...
(By the way, I'm not associated with either group, though I and my colleagues at PolicyLink admire what they do)